Breaking News Instant updates and real-time market news.

2019-01-09 17:16:35

ZTCOY

ZTE Corp.

$0.00

(0.00%)

, LITE

Lumentum

$44.73

1.29 (2.97%)

…17:16

01/09/19

01/09

17:16

01/09/19

17:16

U.S., Israel discuss worries over China telecoms, Reuters reports

White House national security adviser John Bolton brought up U.S. concerns over the use of Chinese telecoms equipment in sensitive sectors during a weekend meeting with Benjamin Netanyahu, the prime minister of Israel, Reuters reports, citing a U.S. official. "We are all concerned about theft of intellectual property and Chinese telecoms companies that are being used by China for intelligence-gathering purposes," a senior administration official who was briefed on the talks told Reuters. The Trump administration has taken steps seeking to curtail market penetration by Huawei and ZTE Corp. (ZTCOY), two of China's largest network equipment makers. According to reports, Huawei accounted for nearly 17% of Lumentum's (LITE) sales in FY17, about 15% of FY17 sales for Oclaro (OCLR) and 11% of FY17 sales for Finisar (FNSR). The company competes in China with ZTE, Infinera (INFN) and Ciena (CIEN). Reference Link

Roth Capital analyst Suji Desilva said he was encouraged by positive reviews for ZTE's (ZTCOY) Axon 9 smartphone, which uses Pixelworks' (PXLW) Iris mobile processor. Of note, reviews have emphasized the high aspect ratio OLED display and viewing quality, affirming his constructive thesis on the value of Pixelworks' core video technology, Desilva tells investors. He raised his price target on Pixelworks shares to $7 from $6 and maintains a Buy rating on the stock.

08/23/18

PIPR

08/23/18UPGRADETarget $26PIPROverweight

Finisar upgraded to Overweight from Neutral at Piper Jaffray

Piper Jaffray analyst Troy Jensen upgraded Finisar (FNSR) to Overweight from Neutral and raised his price target for the shares to $26 from $18. The shares closed yesterday down 95c, of 5%, to $18.65. China demand is returning via Huawei and ZTE (ZTCOY), Finisar is facing easy comps following five quarters of depressed demand and the upcoming 400G cycle should provide a tailwind in 2019, Jensen tells investors in a research note. On top of improving optical industry dynamics, the analyst believes Finisar's new CEO will improve the cost structure and execution at the company and drive better profitability. Now is a "great time" to revisit owning the shares, Jensen contends. The analyst this morning also upgraded Acacia Communications (ACIA) to Overweight from Neutral.

08/23/18

PIPR

08/23/18UPGRADETarget $46PIPROverweight

Acacia Communications upgraded to Overweight from Neutral at Piper Jaffray

Piper Jaffray analyst Troy Jensen upgraded Acacia Communications (ACIA) to Overweight and raised his price target for the shares to $46 from $38. Demand for optical is improving and Acacia is the best way to play the upcoming 400G cycle, Jensen tells investors in a research note. He believes the company's revenue growth will accelerate amid easy comps, improving demand from ZTE (ZTCOY), recent design wins and upcoming product cycles. Acacia can return to profitability levels seen before the China/ZTE slowdown, the analyst contends.

08/16/18

RILY

08/16/18NO CHANGETarget $50RILYBuy

Fabrinet price target raised to $50 from $40 at B. Riley FBR

B. Riley FBR analyst Dave Kang maintained a Buy rating on Fabrinet (FN) and raised his price target for shares to $50 from $40 ahead of the company's Q4 earnings on August 20, which he expects will be above consensus, as the latest industry data indicates that optical demand continues to improve after a 2017 correction. Kang says he remains a buyer into the print, and that Fabrinet should get a boost with the ban on ZTE (ZTCOY) lifted.

LITELumentum

$44.73

1.29 (2.97%)

12/17/18

NEED

12/17/18NO CHANGETarget $75NEEDStrong Buy

Lumentum can continue posting 'beat and raise' quarters, says Needham

Needham analyst Alex Henderson left recent meetings with management with a "strong conviction" that Lumentum can continue to post "beat and raise" quarters. With the Oclaro deal closed, the analyst increased his estimates for Lumentum to reflect the combined company numbers. He believes the company looks well positioned and keeps a Strong Buy rating on the shares with a $75 price target.

12/18/18

NEED

12/18/18NO CHANGETarget $62NEEDBuy

Fabrinet price target raised to $62 from $58 at Needham

Needham analyst Alex Henderson raised his price target on Fabrinet (FN) to $62 and kept his Buy, citing the recent commentary from Ciena (CIEN) regarding "strong optical demand" as well as his site visits to Lumentum (LITE) and NeoPhotonics (NPTN). The analyst believes that Fabrinet is "well positioned" as companies move out of China" and look for production alternatives, while its recent acquisitions in the optical space should "add business to Fabrinet". Henderson further notes that the global demand for optical products is looking "robust".

01/03/19

NEED

01/03/19NO CHANGETarget $65NEEDStrong Buy

Lumentum price target lowered to $65 from $75 at Needham

Needham analyst N. Quinn Bolton lowered his price target on Lumentum (LITE) to $65 after the negative Q1 revenue pre-announcement from Apple (AAPL). The analyst says the reduction is intended to "de-risk" his forecasts on the company's 3D exposure to Apple, as he also lowers his 2019 3D sales forecast to $405M from $465M. Bolton is keeping his Strong Buy rating on the shares however, stating that excluding 3D, the company's "business looks strong with robust optical demand for ROADMs and Pumps and solid dynamics in Industrial lasers".

01/03/19

RILY

01/03/19NO CHANGETarget $62RILYBuy

B. Riley FBR an 'aggressive' buyer of Lumentum on today's selloff

B. Riley FBR analyst Dave Kang says he's an "aggressive" buyer today of Lumentum Holdings (LITE) on the selloff related to Apple's guidance cut last night. Apple weakness believe was already reflected in Lumentum's November preannouncement, Kang tells investors in a research note. He keeps a Buy rating on the shares with a $62 price target. The stock in early trading is down 8%, or $3.36, to $39.23.

OCLRBought by LITE

$0.00

(0.00%)

11/12/18

CHLM

11/12/18DOWNGRADETarget $24CHLMHold

Finisar downgraded to Hold from Buy at Craig-Hallum

Craig-Hallum analyst Richard Shannon downgraded Finisar (FNSR) to Hold from Buy and raised his price target on the shares to $24 from $23. The analyst believes that II-VI's (IIVI) $26/share cash and stock offer for the company, which was a 38% premium to the close on November 8th, is more than a fair deal, given that Lumentum's (LITE) offer premium for Oclaro (OCLR) earlier this year was 27%. Shannon has some doubts about whether this deal will close given the Lumentum/Oclaro deal has not yet closed and the intensifying political standoff between the US and China, but also admits II-VI and Finisar would not have agreed to this deal if there was not a good chance of closing.

11/13/18

PIPR

11/13/18NO CHANGETarget $72PIPROverweight

Piper remains buyer of Lumentum following yesterday's 33% decline

Piper Jaffray analyst Troy Jensen remains a buyer of Lumentum (LITE) shares following yesterday's 33% decline. The reduced forecast at Apple (AAPL) has nothing to do with lost share for Lumentum, rather it is more indicative of lower sales forecasts at this key account, Jensen tells investors in a research note. The analyst continues to believe the 3D sensing market "will grow handsomely" with Apple and he notes that Android phones are just beginning their adoption. He also sees a pending opportunity for world facing 3D sensing applications. Further, the core telco optics market is in the early innings of an upgrade cycle, which should provide a "nice tailwind" for Lumentum, says Jensen. He also thinks the pending acquisition of Oclaro (OCLR) could also be a catalyst for the shares given the earnings accretion once the merger gets approval. The analyst lowered his price target for Lumentum to $72 from $85 and reiterates an Overweight rating on the name.

12/06/18

MKMP

12/06/18DOWNGRADEMKMPNeutral

Finisar downgraded to Neutral from Buy at MKM Partners

MKM Partners analyst Michael Genovese downgraded Finisar (FNSR) to Neutral from Buy with a price target of $24 after its merger agreement with II-VI (IIVI) announced last month. The analyst further notes that Q4 is trending well for the optical components group which also includes Lumentum (LITE) and Oclaro (OCLR), but believes that the guidance for March will be "sequentially down due to annual price negotiations and Chinese New Year".

FNSRFinisar

$21.39

0.01 (0.05%)

12/18/18

LOOP

12/18/18NO CHANGETarget $23LOOPHold

Finisar price target raised to $23 from $20 at Loop Capital

Loop Capital analyst James Kisner raised his price target on Finisar (FNSR) to $23, reflecting the "approximate value of the total consideration" that its shareholders will receive in the "very accretive" acquisition by II-VI Incorporated (IIVI). The analyst also lowers Finisar's FY20 EPS view to $1.06 from $1.71 and keeps his Hold rating on the stock, citing a "more conservative approach" in his forecasts for 3D sensing and "200G/400G datacom".

Piper Jaffray analyst James Fish notes that the $660M acquisition of Luxterra announced by Cisco (CSCO) yesterday will have "mostly negative" impact on datacom focused optical transceiver suppliers Finisar (FNSR) and Applied Optoelectronics (AAOI). For the former, the analyst notes that Finisar generates about 75% of revenues from datacom transceivers and has frequently experienced Cisco as a 10% plus customer, adding that the vertical integration of the deal will diminishing Cisco's need for merchant transceivers. For the latter, the analyst notes that while Applied Optoelectronics does not "directly sell these components", the Luxterra deal shrinks its market and may lead to more aggressive price moves by the competitors. Fish also sees Fabrinet (FN) as a direct beneficiary of the Luxterra deal given its position as its contract manufacturer that stands to benefit "as Cisco ramps production of SiP transceivers."

12/31/18

12/31/18UPGRADETarget $40Outperform

II-VI upgraded to Outperform on valuation at Northland

As previously reported, Northland upgraded II-VI (IIVI) to Outperform from Market Perform and increased its price target to $40 from $39. Analyst Tim Savageaux said the pullback in shares following the Finisar (FNSR) discounts an overly negative view given both pro forma earnings power and deal synergies of nearly $4/share.

INFNInfinera

$4.32

-0.07 (-1.59%)

11/09/18

JEFF

11/09/18UPGRADETarget $5JEFFHold

Infinera upgraded to Hold from Underperform at Jefferies

Jefferies analyst George Notter upgraded Infinera to Hold while lowering his price target for the shares to $5 from $7.75. The analyst cites valuation for the upgrade following this week's post-earnings selloff.

11/13/18

MSCO

11/13/18DOWNGRADETarget $6MSCOEqual Weight

Infinera downgraded to Equal Weight from Overweight at Morgan Stanley

Morgan Stanley analyst Meta Marshall downgraded Infinera to Equal Weight and lowered his price target for the shares to $6 from $9.50.

11/13/18

MSCO

11/13/18DOWNGRADETarget $6MSCOEqual Weight

Infinera downgraded to Equal Weight after analyst day delay at Morgan Stanley

As previously reported, Morgan Stanley analyst Meta Marshall downgraded Infinera to Equal Weight from Overweight as she sees "no reason to race in" until there are signs that the revenue base has stabilized. The company's recent earnings report revealed that the Coriant business is in worse condition than expected, noted Marshall, who believes the company's postponement of its analyst day leaves few opportunities for a positive rerating in the next 6 months. Marshall lowered her price target on Infinera shares to $6.00 from $9.50 after lowering her 2021 EPS estimate to 40c-60c from the 75c-$1.00 she'd estimated earlier.

11/13/18

11/13/18DOWNGRADE

On The Fly: Top five analyst downgrades

Catch up on today's top five analyst downgrades with this list compiled by The Fly: 1. Lumentum (LITE) downgraded to Neutral from Overweight at JPMorgan with analyst Samik Chatterjee saying yesterday's negative pronouncement underscored the challenges likely to be faced by Apple (AAPL) supply chain companies in delivering to investor expectations as Apple continues to prioritize its premium pricing strategy on iPhones relative to volumes. 2. Best Buy (BBY) downgraded to Neutral from Buy at BofA/Merrill with analyst Curtis Nagle citing expectations for slowing industry growth, difficult comps in key products and cost inflation. 3. Perrigo (PRGO) downgraded to Hold from Buy at Berenberg with analyst Patrick Trucchio saying although the key reason to own Perrigo shares remains intact, namely the U.S. government's push to shift more products from prescription to nonprescription, "too much uncertainty in generics has placed us on the sidelines." 4. Sabra Health Care (SBRA) downgraded to Neutral from Buy at Mizuho with analyst Richard Anderson saying he wants to a take a "pause" until the earnings reset from the "surprise news" of Senior Care stopping rent payments since May becomes better understood. 5. Infinera (INFN) downgraded to Equal Weight from Overweight at Morgan Stanley with analyst Meta Marshall saying she sees "no reason to race in" until there are signs that the revenue base has stabilized. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.

CIENCiena

$36.57

-0.08 (-0.22%)

12/14/18

BMOC

12/14/18NO CHANGETarget $42BMOCOutperform

Ciena price target raised to $42 from $36 at BMO Capital

BMO Capital analyst Tim Long raised his price target on Ciena to $42 after its "strong" Q4 results that were driven by improving margins, saying the company continues to "diversify away from the traditional telco vertical into growth areas like webscale, where demand is strong. " The analyst also keeps his Outperform rating on Ciena while citing the company's "growth outlook, improving balance sheet, and consistent capital return program."

12/14/18

MKMP

12/14/18NO CHANGETarget $45MKMPBuy

Ciena price target raised to $45 from $38 at MKM Partners

MKM Partners analyst Michael Genovese raised his price target on Ciena to $45 after its "strong" Q4 results, saying the stock is a "must own" in the communications equipment sector. The analyst cites the company producing "another record quarter for orders, with book-to-bill well above 1.0", along with a 12% increase in its backlog in Q4, while its FY18 top-line grew by 10% in a market where revenues grew by mid-single digits. Genovese keeps his Buy rating on Ciena, stating that its market share gains are driven by its "best technology" and trust from its Tier 1 customers.

12/14/18

LOOP

12/14/18DOWNGRADETarget $36LOOPHold

Ciena downgraded to Hold from Buy at Loop Capital

Loop Capital analyst James Kisner downgraded Ciena to Hold from Buy, stating that while its 2019 revenue guidance was above consensus he thinks the rest of guidance, with gross margin below consensus, implied roughly in-line Q1 EPS. He stills views the company as very well positioned in the optical systems market, but sees the stock as close to fully valued, Kisner tells investors. He maintains a $36 price target on Ciena shares.

12/14/18

ARGS

12/14/18NO CHANGETarget $42ARGSBuy

Ciena price target raised to $42 from $38 at Argus

Argus analyst James Kelleher raised his price target on Ciena to $42 and kept his Buy rating after its Q4 earnings beat and the management's guidance of at least 20% EPS growth over the next 3 years. The analyst notes that growth rate being "much faster than the historical trend and the outlook for its pees", adding that the company also has no "direct" exposure to the China slowdown as it looks to build market share profitably and with no pricing erosion.

Stock futures were higher throughout the early session amid optimism surrounding the ongoing trade talks with China. The President is scheduled to meet with China's top trade official this afternoon with hopes of forging a deal, according to reports. The futures action has led to a higher open for the market, which will have little to rely on other than trade headlines as the domestic economic calendar has nothing scheduled for release today. Nearly an hour into trading, the S&P is up 11 points, the Dow is up 130 points and the Nasdaq is up 34 points.